12 Jun Ben’s Top 3 Parcel Shipping Mistakes
Ben’s Top 3 Parcel Shipping Mistakes
Encyclopedia.com describes an opportunity cost as “the opposite of the benefit that would have been gained had an action, not taken, been taken—the missed opportunity.” When applied to your business and shipping specifically, the opportunity cost might be the profit your company could have earned, or the dollars you could have saved had you deployed available resources and technology. Franklin Parcel’s mission has always been to help shippers make the most of every opportunity. That is why we have put together the Top 3 Parcel Shipping Mistakes.
Shipping with the Wrong Size Packaging
We see this all the time, as you likely do as well, with many products purchased online, the item in the box takes up less than half the space. Not only is this inefficient, but it is a very costly mistake made by many shippers that do not really understand the implications of a carrier’s dimensional rating system or DIM. UPS and FedEx calculate a package’s dimensional weight based on a formula of L x H x W divided by a factor of 139 (the current DIM). A shipper is then charged whichever weight is higher, either actual weight or dimensional weight. Unfortunately, many shippers frequently overspend because of excessive packaging and the lack of understanding how to effectively reduce the impact of this DIM calculation.
Not Deploying Technology
From small shippers to Fortune 500 companies, it is shocking how many still lack comprehensive shipment data visibility and analytics. With today’s inexpensive technology and simple implementation, it is truly just an unacceptable excuse. Parcel shipping has become more sophisticated and complex over the years by design. UPS and FedEx are the industry giants and obviously understand your shipping data better than you. From the previously discussed DIM rating, to over 130 different accessorial fees, zone rules, and layers of other complexities, understanding the impact of the carriers’ annual rate increase on your business without technology is impossible. Sure, you could rely on your carrier’s “salesperson” that the impact is minimal and you have “great pricing for a company your size”, or better yet, why not sign up today for your free technology platform and see for yourself the opportunity cost.
Failing to Negotiate Effectively and Controlling the Process
The single biggest mistake in the parcel shipping puzzle remains shippers that do not control their contract rate negotiation from start to finish. All too often we hear what a “great relationship” a shipper has with their parcel representative and how they have “the best rates” in their territory. While we agree, it is important to have a good carrier relationship, it is even more imperative and more critical to negotiate with data. If you, like most businesses, negotiate without leverage, without genuinely knowing your numbers, then the carrier will dictate the terms and you will never optimize your shipping rates, and that is the ultimate missed opportunity.
Franklin Parcel offers the world’s most advanced parcel shipping analytics, optimization, and claim identification platform. We simplify the complex, we shine light behind the scenes, and we make it ridiculously easy for shippers to get control of their data, negotiate with strength and recover money. This is your opportunity cost knocking! Sign up today for your free account.